RAISED hopes for a rebound in China's steel production have helped push the spot price for iron ore to an eight-month high as optimism over the growth outlook for China's manufacturing sector spreads.

Local iron ore producers were among the top gainers on the sharemarket, with Mount Gibson rising 7.2 per cent, Atlas Iron 5.9 per cent and Fortescue Metals 5.8 per cent.

The iron ore spot price hit $US143.50 a tonne in Asian trading this week, extending its gains from about the $US115 mark touched in early December. It is well clear of the lows of about $US90 a tonne that were touched in September and placed financial pressure on Andrew Forrest's Fortescue Metals Group, forcing it to axe growth plans.

China may be slowly reducing its reliance on exports for economic growth. Photo: AFP

The iron ore price has been pushed steadily higher this week after the release of the latest HSBC purchasing managers' index for China, which stood at 51.5 in December, its highest since May, and up from 50.5 in November.

The index's upswing signalled further strength in Chinese manufacturing, HSBC said, with output expanding at its quickest since March 2011. More importantly, the data reflected a rise in overall orders, despite an export order decline, prompting optimism that China is gradually weaning itself off over-reliance on exports for growth.

The data marks a continued rebound for the Chinese economy in the final quarter of 2012, after a prolonged period of sub-par growth over the previous 18 months.

The extended rebound of the iron ore price has prompted Fortescue to announce recently the restart of work on its Kings iron ore development in the Pilbara, which had been stalled amid concerns about the company's ability to finance its ambitious expansion program after a steep decline in the iron ore price.

''The consensus view is for an iron ore price of $US120 a tonne for 2013, which signals some pessimism on the outlook,'' one analyst said on Wednesday.

The iron ore price has been buoyed by Chinese steel mills restocking before the Chinese New Year on February 10, which will dampen demand in the first half of February, with analysts also warning the gains might be a knee-jerk reaction to the rapid pick-up in economic activity off a low base.

''Investors are looking for steel production and iron ore demand prospects post the Chinese New Year and also the March National Peoples Congress,'' the analyst said, with a focus also on China's central bank's efforts to curb shadow banking activities, which may further slow growth towards midyear.

China's outgoing President, Hu Jintao, in an address on December 31, said China would ''step up efforts to promote strong, sustainable and balanced growth in the world economy''.

■ ArcelorMittal is to sell a 15 per cent stake in Canadian iron ore mine Labrador Canada to a consortium that includes South Korean steel maker Posco and Taiwan's China Steel Corporation for $US1.1 billion. The mine produces 15 million tonnes of iron ore annually, along with 8 million tonnes of iron ore pellets.